Should You Buy Micron Stock on the Dip? | MU Stock Analysis

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마이크론 4분기 실적은 매출 87억달러(전년비 대폭 증가)와 마진 개선으로 양호했으나, 소비자향 시장(PC·스마트폰) 회복 지연과 2분기 매출 가이던스 79억달러(컨센서스 89억달러 대비 하회)로 주가가 약 20% 급락. 데이터센터 매출은 전분기 대비 40%+ 성장해 전체의 50%를 넘음. 자본지출 증가(매출 대비 33%+)로 잉여현금흐름 약화 우려. 선행 PER 6.7배로 밸류에이션은 낮아져 여전히 매수 관점 유지하나 이전보다 매력도는 하락.

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01. Micron d on Wednesday December 18th 2024 those results sent the stock price crashing almost 20% as investors did not like what they saw from Micron Technology of course I'm disappointed in that because I had I even said before the earnings release that the stock price was so undervalued that it made sense to buy shares before the earnings came out so these numbers are a real disappointment for me nevertheless I'm going to review these latest Financial figures compare them with the now even lower valuation to answer the question if I think Micron stock is a buy here on this dip or if the results were so disappointing that investors should now not be buying the stock so I'll review the figures highlight what is sending the stock price crashing precisely and then update my buy recommendation for micron stock in one bright spot for the company they did say that data center Revenue grew by over 40% from the previous quarter and it's up over 400% year-over-year that increase was so large that now data center Revenue makes up for for over 50% of the company's business this makes it a more attractive business to own because the data center segment is expected to grow much faster over the next 5 to 10 years than the company's consumer oriented segments which include personal computers tablets smartphones Etc the data center segment is the one that's benefiting the most is is the segment that Nvidia is benefiting from most significantly so Micron saying that it delivered a record quarter and their data center Revenue surpassed 50% of the revenue for the first time so far so good this isn't what sent the stock price crashing this investors liked but what investors didn't like was the next statement consumer oriented markets are weaker in the near term and we anticipate a return to growth in the second half of our fiscal year second half of our fiscal year meaning the next quarter the second quarter is not going to be good and we see that in the company's forecast for Q2 which I will share with you which was the big disappointment coming out of the company's quarterly earnings release these are the smartphone and personal computer markets primarily and Micron Technology noting that those segments were slower to recover than initially expected Market partic participants including myself have been waiting for a recovery in the personal computer market and that's been much slower than anticipated and companies like Micron Intel and others have experienced slower than expected recoveries as a result of that market not being as robust at this point as we were expecting 20122 and 2023 were horrible years for the personal computer Market because so many people bought computers in 2020 and 2021 when the work from home Trend the learn from home Trend and the everything from home Trend was at Full Steam and so if you bought a computer in those years you're not going to need one in 22 and 23 the same was true although not as extremely for smartphones because people bought a lot of smartphones in 2020 and 2021 as well because they had more money to spend and fewer places to spend that money one of the that benefited was smartphones and so there was a Gap a bit of a vacuum in 22 and 23 which was expected to recover in 2024 at least mid 2024 because those electronics that were purchased in 2020 and 2021 are now getting relatively old and people want the newer technology and so the market was anticipating of recovery in those in those segments which didn't materialize it didn't happen in 2024 and so now we're looking ahead and Micron is saying it's not even going to happen in its next quarter it's going to happen further down the line in its fiscal year 2025 so that's what really disappointed Market participants as well as one other item I will share with you in a little bit so the actual results revenue and margins and earnings were great right Revenue jumped to 8.7 billion up from 4.7 billion operating margin improved to 25% from negative - 24% earnings per share jumped to a167 from negative a112 so the year-over-year improvements were massive for micron in this quarter one other item that concerned investors I don't want to say disappointed but concerned is the growing Capital expenditures investments $3 3.13 billion which resulted in adjusted free cash flow of just 112 million so Micron is being compared to Intel right now which is the other semiconductor design plus Manufacturing Company there's relatively few design plus most companies are doing one or the other Micron and Intel are doing both and Intel of course you've seen the troubles at Intel stock price down cash flows down Capital expenditures soaring and investors are concerned that Micron is heading in that direction because as I noted they're forecasting slower growth in the SEC in the upcoming quarter while at the same time they increased their Capital expenditures in the first quarter 3 billion divided by 8.7 billion that's a greater than 33% of cap X to sales ratio that's a really high ratio and so investors are concerned about that while at the same time the company is giving a below expected forecast management said they expect revenue of $7.9 billion for their second quarter of 2025 the analysts on Wall Street were expecting Micron to deliver a forecast closer to $8.9 billion the number 7.9 billion is 800 million below what they generated in the first quarter so expecting a sequential slowdown which the market was not anticipating the market was anticipating a sequential increase actually for micron's results so this was a an Abrupt shock and you can understand why the stock price fell as much as it fell following these results so all that being said just 6.7 which I think is a really cheap valuation now these results were disappointing to be sure however the stock price adjusted downward already over 15% and so now you're getting this business at a much lower price to account for those disappointing metrics that it reported so to answer the question do I think Micron is still a buy following these results the answer is yes I still like Micron I still think it's one of the top 25 stocks to buy right now although I like it a little bit less following these earnings results I like it a little bit less because of the disappointment in the company's forecast and in the slower recovery in the consumer oriented markets but I do like that the data center business is absolutely thriving